5 Reasons You Need a Will

One of my 2013 New Year’s resolutions was to make a will. I dilly-dallied all year, but I finally got it done towards the end of 2013. Actually, I have been meaning to make a will ever since our kid was born. It’s just too easy to keep putting it off. I’m relatively young and healthy, so it’s inconceivable to think about death at this point. However, a will is a necessity for many of us and here are some reasons why.

Minor Children

Every parent with children needs to have a will. You need to decide who will take care of your children if something happens. If you don’t have a will, the state court will decide for you. My brother Nik agreed to take care of RB40 Jr., so I designated him as the guardian and trustee.

I also don’t trust a minor to make good financial decisions, so I set the inheritance age to 22 and 30. Nik will use the inheritance to pay for Jr.’s education. When he turns 22, he’ll inherit 50% of what’s left after paying for college. Then he’ll get the rest at 30. I’d like him to try to make his own money before getting a windfall.

Who get your assets?

For me, it’s pretty simple. Mrs. RB40 gets everything when I go. If both of us pass away at the same time, then everything goes into a trust. Nik, my trustee, will use the trust to pay for RB40 Jr.’s higher education. The kid will then receive 50% of what’s left when he turns 22 and the rest when he is 30.

Doh! I forgot to designate more backups. I’ll need to revise the will to include my younger brothers. This is really depressing, but we need to think it through. If you don’t have a will, then the court will decide how to divide your asset with a formula. Modern families are very complicated and I’m sure you want the final say, rather than depending on someone else’s formula.

Note – You should make sure all your accounts have the correct beneficiaries as well.

Estate planning

Regarding estate planning, Babikian adds “to put it simply, your estate is all your stuff, such as material goods and the financial commitments you have made such as mortgages and car loans. If you have one or more of the following: house, car, bank account, retirement savings, life insurance and bills — you have an estate.”

The federal government wants a piece of ‘all your stuff’ if your estate is more than $5,250,000. You can reduce this tax by setting up irrevocable trusts and giving money away to charity and/or family. Most families don’t have over $5 million in assets, but if you do, you need to work on a plan with a good estate planner.

Some states also collect estate tax and Oregon where we live is one of them. The estate tax exemption is much lower in Oregon at $1,000,000. The tax rate on assets over a million dollar starts at 10% and goes up to 16%. That’s A LOT of tax! I’ll have to make it my mission to not die while I’m a resident of Oregon…

Trustworthy executor

One important part of making a will is appointing an executor. The executor will be in charge of your assets after your death. You need to find someone you trust so they won’t squander your assets. Again, if you don’t have an executor, then the court will decide for you. If you have a big family, then you really need to figure out who you want to be your executor. Is it your mother, father, brother, 3rd cousin, or just a friend you really trust?

Last words

A will is also a place for any last words. I want to donate my organs, but it that doesn’t work out, then the body can be donated to science. I don’t want my family to spend a lot of money on funeral arrangements. If you have any last words for your ex, this is probably a good place to let him or her know how you feel…

Follow up

I finished making a will, but there are still a few things to follow up on.

Find 2 witnesses and sign it. I need to do this ASAP so the will is official.

Create a detailed plan for what to do with the assets. For example, Mrs. RB40 wouldn’t want to deal with rental properties if I’m not around. I need to come up with a plan and run it by Mrs. RB40 and my brothers.

Whew. Creating a will is not easy, but at least I took the first step. If you have children or assets, you need to sit down and create a will. I went with an online vendor who helped me create my will, it covers our family’s needs without breaking the bank. The primary purpose of this will is to name a guardian for our kid. We’ll need to work with an estate planner once we accumulate more assets, but I think this is good enough for now.

Do you have a will? Would you trust the state court to decide with to do with your children and assets?

*This post is sponsored by Transamerica Life Insurance Company, however all thoughts and opinions are my own. This blog is general information only. Transamerica does not provide legal advice and the information in this blog should not be considered legal advice or a substitute for individualized legal advice. Consult a qualified attorney to help with estate planning.

We were one of those weird plan-ahead families, and got a will done soon after we married. Paid a top dollar attorney to draft one up, since this was in the time before you could get simple forms on the intarwebz for comparatively next to nothing, and articles like this one, on the fly, for well, actually nothing.

Do you have any recommendations on how/where to fill out the will? I see websites like legalzoom.com and others offering will services. Do you recommend using your own legal will and filling out yourself or using a professional service?

I’ve procrastinated about this for years, and I still am. Without kids, and with complicated families, it’s such a mess to figure out who will get what, and when. Like if one of us dies first, and then the other, we would still like all assets going to be split between both families…but in a really diversified way. Ugh.

I know waiting until we have a kid isn’t a great excuse…but maybe I can put it off for just a while longer?

We had our will taken care of about 4-5 years ago, about a year after our first child was born. Our state is so backwards that I wouldn’t trust them one bit to determine who to give our kids or assets to. Unfortunately, I think wills are much like life insurance in that many just simply do not think about them. We have that conversation with my in-laws regularly. They’re in their 60’s and still do not have a will. They’re fairly smart financially, but the fact that their state can have a significant role in what happens to their assets is completely lost on them.

I talked to my in law last December and they didn’t have a will either. I guess they assume, their kid will get everything, but I don’t know if that’s a valid assumption. They really need to get a will done.

We finally got around to doing wills in 2012, motivated by some health challenges I faced! Where we live a will can be done by a notary, if things aren’t too complex. So we got two wills done for just $500.

We had a lot of complicating issues for our wills, so we went to lawyers in our state. The lawyers handled the witnesses and notaries for us, we just had to show up, show ID and sign.

We did wait until we had a kid though, previously, we were OK with what the state would have decided, but our chosen guardians are also out-of-state, so the lawyer was the easiest way for us to go. Cost us about $3200 for two wills, two powers of attorney, and two medical powers of attorney. Our wills sets up several trusts due to some particular family circumstances, and we liked the ability to run things by the lawyer.

I’m not saying this to just drum up biz for my fellow attorneys, but I don’t really recommend using legalzoom or any similar site – they’re just too standardized from what I’ve seen. In full disclosure, we were slack in writing ours, only doing it last year when our child was 2 1/2. And then the primary reason was similar, to resolve the custody issue. We live in a community property state with fairly simple division rules if you die intestate (sans will) and just defaulted to those rules — which we could do because we knew what they were. Beneficiaries were already identified in the various policies and accounts, and with only one child she’d get everything if we both die, which was really our only concern. A simple will prepared, or at least reviewed by an attorney, shouldn’t cost too much more than legalzoom and will lead to a more orderly and less likely to be challenged administration.

By all means use it or a similar service if it’s the only way you’re going to get it done. This isn’t my area of expertise and I wasn’t too overly concerned about writing one because I’m confident that everyone concerned would have been able to work it out amongst themselves, but it’s comforting to know that a plan has been agreed on. Now all I have to do is make sure it never gets enacted.

Well said main. And I do agree with Wilson, it makes sense to pay a couple hundred more dollars to have it done correctly. For something of such importance, I think a simple form on the internet is terribly risky. Great advice and reasoning here. I think too many people don’t understand the process of when one dies intestate, and just assume their spouse/kids will get everything.

I am a bit naïve, I once lend some money to a friend so I just went to Susan Orman website. Someone had given me a free box with Orman’s website and a code. That gave me access to all forms needed, my friend filled out the forms, printed them out and took them to a public notary to get them signed. I also saw forms for a will in the site, I plan to follow the same procedure. I AM NOT SURE IF THIS IS THE CORRECT LEGAL OR ACCEPTABLE LEGAL WAY TO PREPARE A WILL OR LIVING TRUST.

My wife’s father passed away this past year, and I can personally attest how important having a will is. He did not and it created a great deal of chaos in her family. What was most distressing was that her older sister had to make all of the decisions without any guidance. It was super stressful for her and cause relational rifts that need time to mend. It is a huge blessing to your family to have a will.

Definitely need a will, and there are those who could benefit from a trust even well before you reach $5M in assets.

Sickening, though, how the governments line up to steal your money after you’re dead. As if your survivors don’t have enough to worry about, you have to worry about the government taking yet more of what is literally your life’s work.

Great article. Very user friendly. My father died intestate in Texas. It was his third wife, my step mother (they were only married 6 years) & each of them had adult children. She was so concerned that her children would inheirit from her estate. Yet she had no property as I was distributed to her children when her 1st husband died. Additionally, my siblings & I watched as have got the whole enchilada as decided by a judge, she died just two years later & her kids got my seven sibling’s & my inheritance. Don’t think that by not having a will that the state will distribute equally & uphold your final intentions. Make it legal. Get an attorney, enact a will & spell it out.

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